With the Middle East conflict pushing fuel prices to $3.50 a litre, cost-of-living decisions are changing daily lives.
They have to.
The headlines are constant.
Their narrative tightens the pressure on short and long-term hopes.
They also hide alternative ways to get through this.
Not only credible, but essential alternatives.
And it might be an important reframe in the history of financial advice.
THE FUTURE
We are wired to turn to the screens in our lives for advice about better cost-of-living decisions.
Where to find the cheapest fuel.
The cheapest holiday.
The cheapest groceries.
The cheapest utilities.
The cheapest advice.
The internet never runs out of cheaper.
And, for most of its history, financial advice has played the same game.
The best-performing investment.
The lowest-cost superannuation fund.
The bargain insurance policy.
The highest tax returns.
The most competitive mortgage rate.
Cost of living, dressed up in a Statement of Advice.
That, however, is not advice.
That’s shopping.
As with the COVID-19 pandemic, the cost-of-living crisis will increase demand for financial advice.
The regulations, the compliance machinery, the AI tools being built right now – all of it will get better and better at delivering affordable financial decisions faster and cheaper than any human adviser ever could.
And that’s fine.
Because the best financial advisers I know aren’t in the cost-of-living business.
They’re in the value-of-living business.
VALUE OF LIVING
Cost-of-living decisions are driven by what is affordable.
Value-of-living decisions are driven by what is significant.
These are not the same thing.
Affordability is an emotional topic.
So is significance.
In fact, they are so emotionally loaded that some of the most consequential decisions people make in their financial lives are simultaneously significant and unaffordable.
Decisions that make less financial sense.
Buying homes we can’t afford.
Supporting families at our own expense.
Living lifestyles beyond our means.
Pursuing relationships through financial minefields.
A cost-of-living spreadsheet would advise against decisions like these.
Yet, these decisions can turn out to be exactly right.
SIGNIFICANCE
I have four kids. All creatives. An artist, a musician, an actress, a writer, and all mixes thereof.
Thankfully, no one has yet convinced them to live their lives driven by a cost-of-living spreadsheet dictating their every affordable, predictable step.
Because affordability didn’t shape them.
Significance is what I always hope shapes them.
What is significant to them?
That pull toward what matters, even when – especially when – it is uncomfortable, unpredictable, and often seemingly less or unaffordable.
My point is this: we don’t advise the people we love primarily towards affordable lives.
We hope they pursue significant ones.
WHICH PATH?
Yet the financial advice industry – by design, by regulation, by habit, by lack of leadership – has been built almost entirely around the affordable path.
Regulations and policymakers will sensibly drive AI-powered advice along well-trodden, proven, and affordable guidelines.
That’s appropriate.
That’s what AI Advice can do well.
But humans haven’t developed by pursuing sensible guidelines within comfortable affordability zones.
People blossom, fail, and blossom again by pursuing what is significant and valuable to them.
By taking the path that costs more than they planned, demands more than they expected, and returns more than they ever calculated.
Financial advice – real advice, not the repackaged-product-distribution kind – does something the AI algorithms cannot.
It identifies what is genuinely significant to a specific person, at a specific point in their life.
It paves the best path towards that significance.
And it advises through every awkward, expensive, risky step along the way.
Life isn’t a box of chocolates, but it also isn’t a cost-of-living spreadsheet.
That’s the advice worth being in.
Not cost-of-living advice.
Value-of-living advice.
CERTAINTY CONFERENCE
On 2nd and 3rd July, at Manly Beach, I’m bringing together a unique group of financial advice teams building firms designed around exactly this distinction.
Not cheaper advice.
Not easier advice.
Not more, or less, compliant advice.
More significant advice.
To the clients who pay for it, and to the advisers who deliver it.
If the value-of-living framing resonates with how you want to grow your own practice – or how you wish it could – reply, and I’ll send you details.
Jim
Photo Credit: CanvaPRO-1001Love-MAEEcfQkYkA